Last week, the government borrowed a massive Ksh.213.4 billion in a seven-year bond, at 15.84%, setting tongues wrangling.
Initially offered at Ksh.60 billion the infrastructure bond is tax free.
Coming just a few days to the financial year, it pointed to a government with deep cash needs, and it looks likely the National Treasury may re-open some earlier bonds to pick additional resources through tap sales.
Implications
Some experts are now worried that heightened government borrowing will crowd out the private sector from the credit market.
Since July, growth in private sector credit has been slowing down, underpinning such fears.
This single borrowing is almost half the total approved annual domestic borrowing of Ksh.438 billion for the year 2022-2023.
Given earlier borrowing it is likely that the government has gone beyond the annual approval.
Between January and March, the Treasury issued treasury bills and bonds worth Ksh.337 billion in the domestic market.
Input by Ndiritu Muriithi
